Landlord & property accountant in West London
Know the real rental profit, the tax building up, and what changes when you sell.
SV&Co helps landlords and property owners across Southall, Ealing, Hayes, Wembley and wider West London with rental accounts, Self Assessment, MTD, property expenses, jointly owned property, Capital Gains Tax and property-company questions.
Start with your property question
Which landlord tax issue are you dealing with?
You do not need to know the technical rule before contacting us.
What is my real taxable rental profit?
Separate rent, running expenses, mortgage finance costs and tax.
See the calculationCan I claim this property cost?
Repairs, agents, insurance, utilities and improvements do not all follow the same tax treatment.
Review expensesDoes MTD apply to my rental income?
Property income can combine with sole-trader income for the MTD threshold.
Check MTDShould the property be in my name or a company?
Tax is only one part of the ownership decision.
Compare ownershipI am selling a rental property.
CGT may need calculating, reporting and paying within 60 days of completion.
Understand the saleRental profit
HMRC taxes the property profit, not simply the rent received.
Rental profit starts with property income and deducts allowable running expenses. Residential finance costs for an individual landlord are then dealt with separately through the finance-cost tax-reduction rules.
Example: one rental property
- Rent received: £24,000
- Agent, insurance and repairs: £6,000
- Property profit before residential finance-cost rules: £18,000
- Mortgage interest: £8,000
An individual residential landlord does not simply reduce the £18,000 to £10,000 by deducting the mortgage interest. Instead, HMRC's basic-rate finance-cost tax reduction is considered separately.
The £1,000 property allowance
Individuals can have a property allowance of up to £1,000 a year. Depending on the circumstances, it can sometimes be used instead of actual property expenses.
If gross property income is £1,000 or less, it may be exempt, subject to the exclusions in the rules. Where actual expenses are larger than the allowance, claiming the actual expenses may be more sensible.
Property expenses
A repair and an improvement can look similar on the bank statement but receive different tax treatment.
HMRC allows normal day-to-day property-business expenses, but capital improvements are not simply deducted from rental income.
Letting & professional costs
Letting-agent fees, certain legal fees, accountancy fees and similar property-management costs can commonly be allowable where they relate to the rental business.
Insurance & services
Buildings/content insurance, service charges, cleaning, gardening, utilities and Council Tax paid by the landlord can be relevant running expenses.
Repairs
Maintenance and repairs can normally be revenue expenses where they restore rather than improve the property. Replacing an old item with a modern equivalent does not automatically turn a repair into an improvement.
Improvements
An extension, significant enhancement or capital improvement is usually not deducted from annual rental profit. Some capital expenditure may instead become relevant when calculating a future capital gain.
Domestic items
Replacement furniture, furnishings, appliances and kitchenware in qualifying residential lettings can fall within separate Replacement of Domestic Items Relief rules.
Mortgage capital
Repaying the capital borrowed to buy the property is not a rental expense. Interest and other finance costs follow the separate residential landlord rules for individuals.
Mortgage interest
For an individual residential landlord, interest relief is not a normal expense deduction.
Since 2020/21, residential property finance costs for individuals are restricted to a basic-rate Income Tax reduction. Companies are outside this individual-landlord restriction and generally deal with finance costs under company tax rules.
A landlord can have modest cash profit after paying the mortgage but a much higher taxable property profit before the finance-cost tax reduction. The effect is particularly important for higher-rate taxpayers.
Making Tax Digital for landlords
MTD uses gross qualifying income before expenses.
For MTD for Income Tax, HMRC combines qualifying personal self-employment and property income. The first cohort entered MTD from 6 April 2026 where qualifying income on the 2024/25 return was over £50,000.
£28,000 self-employment income plus £25,000 gross property income gives £53,000 qualifying income before expenses. The sources can combine even though the activities are completely different.
Ownership
Personal name, joint ownership or limited company can produce very different outcomes.
There is no universal “best” property structure. The right answer depends on financing, tax rate, whether profits are reinvested or withdrawn, future sales, ownership with a spouse/partner and long-term plans.
Personally owned
Rental profit is part of the individual's Income Tax position. Residential finance-cost relief is restricted to the basic-rate tax-reduction mechanism. A future property sale can create personal CGT.
Jointly owned
For spouses and civil partners living together, jointly held property income is normally taxed 50:50. A valid Form 17 can apply where genuine beneficial ownership and income entitlement are unequal and the required conditions are met.
Limited company
The company is a separate legal taxpayer. Finance costs, Corporation Tax, extraction of profits, mortgages, SDLT and future sale/extraction strategy all need considering together. Moving an existing personally owned property into a company is not the same as buying the next property through a company.
Rent a Room
Taking in a lodger can follow a different tax regime.
The Rent a Room Scheme can allow up to £7,500 a year of qualifying receipts tax-free where furnished accommodation is let in your only or main home. The threshold is normally halved where the income is shared with another person.
Selling a rental property
The CGT deadline can arrive long before the next Self Assessment deadline.
For taxable gains on UK residential property, an individual may need to report and pay Capital Gains Tax within 60 days of completion. The current individual CGT rates are generally 18% and 24%, depending on how much of the gain falls within the unused basic-rate band.
The current CGT annual exempt amount for most individuals is £3,000. It is one annual exemption across gains, not a separate £3,000 allowance for each property.
Interactive landlord tools
Understand the mechanics before we review the detailed tax position.
Rental Profit Illustration
Shows the difference between running expenses and residential finance costs.
Simple Property CGT Illustration
Educational screening only. It deliberately excludes Private Residence Relief and other specialist adjustments.
Landlord tax FAQs
Questions we regularly need to separate properly.
Does mortgage interest reduce my rental profit?
For an individual residential landlord, finance costs are generally dealt with through the basic-rate tax-reduction rules rather than simply deducted from rental profit. Companies follow different rules.
Do I add my rental income to my sole-trader income for MTD?
Yes, relevant personal self-employment and property income can combine when HMRC tests MTD qualifying income. The test uses gross qualifying income before expenses.
Can I claim the cost of a new kitchen?
It depends whether the work is a repair/replacement or a capital improvement. Restoring an existing asset can be revenue in nature, while significant improvement or enhancement can be capital. The actual work and old/new specification matter.
Should I put my rental property into a limited company?
Not automatically. A company can change the tax treatment of finance costs and retained profits, but transferring an existing property can create CGT, SDLT, refinancing and legal issues. The long-term plan matters.
How quickly must I report a residential-property capital gain?
Where UK residential-property CGT is reportable, the current rule generally requires reporting and payment within 60 days of completion.
Can my spouse and I simply choose any rental-income split?
No. Spouses/civil partners living together are normally taxed 50:50 on jointly held property income. Form 17 can apply only where the genuine beneficial ownership and income entitlement are unequal and the conditions are satisfied.
Reviewed by
Sandip Vadher, PhD FCCA
Founder of SV&Co Accountancy. Fellow Chartered Certified Accountant with more than 20 years of finance and accountancy experience.
Landlord & property tax review
Tell us what you own, what rent comes in and what decision you are facing.
Annual rental accounts, MTD, expenses, joint ownership, selling a property or considering a company structure.
Rental income, property expenses, mortgage-interest statement, ownership split, purchase date/cost, current estimated value and whether you also have self-employment income.
Ask for a property tax reviewThis draft was checked against current GOV.UK/HMRC guidance on rental income and expenses, property allowance, residential finance-cost relief, MTD qualifying income, jointly owned property, Rent a Room, CGT rates/allowance and the 60-day UK residential-property reporting requirement. The live WordPress version will use the SV&Co Official Data Hub for changing numeric values.